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Think Twice Before Suing; You Might End Up Paying Six Figures In Fees & Costs After You’ve Calmed Down.

July 28, 2015 by

trade secretPlaintiff brought this action alleging that defendant misappropriated a trade secret, or was in the process of doing so, by seeking to hire away specialists in touchscreen technology, a field in which plaintiff and defendant compete. Defendant responded that it was entitled to solicit prospective employment candidates in plaintiff’s workforce and that there was no evidence it had acquired, or was seeking to acquire, any trade secret. After failing to secure temporary injunctive relief, and failing to obtain an order placing under seal evidence derived by defendant from public sources, plaintiff dismissed the action. The trial court awarded defendant $180,817.50 for its attorney fees pursuant to Civil Code section 3426.4, which authorizes such an award to the prevailing party where a claim for misappropriation of trade secrets is found to have been made in bad faith. On appeal, plaintiff contended that this was error because the trial court could not properly find that defendant was the prevailing party, or that plaintiff brought the action in bad faith. In affirming the order, the appellate court concluded: (1) the trial court’s findings are free of procedural error; (2) the finding of bad faith is amply supported by evidence that defendant did no more, and plaintiff accused it of no more, than attempting to recruit the employees of a competitor, which defendant was entitled to do under the laws of this state; and (3) defendant prevailed when, as the trial court impliedly found on substantial evidence, plaintiff dismissed the suit to avoid an adverse determination on the merits. (Cypress Semiconductor Corp. v. Maxim Integrated Products, Inc. (Cal. App. Sixth Dist.; April 28, 2015) 236 Cal.App.4th 243, [186 Cal.Rptr.3d 486].)

Filed Under: Appellate Law News, Legal News, Trade Secret Law News Tagged With: § 3426.4, 186 Cal.Rptr.3d 486, 236 Cal.App.4th 243, Civ.Code, Civ.Code § 3426.4, Civil Code, Civil Code section 3426.4, section 3426.4

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The Mellor Law Firm, APLC
6800 Indiana Avenue, Suite 220
Riverside, CA 92506
Phone: (951) 221-4744
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